Self-Employment in Germany — Gewerbe, Freiberufler and Taxes

Status: March 2026. All information without warranty.

Gewerbe vs. Freiberufler

Gewerbeanmeldung — How to do it

1. Register at your local Gewerbeamt (trade office) — in person or online
2. Cost: €15–60 (depending on city)
3. Bring: ID card, residence permit allowing self-employment (if applicable)
4. You'll receive a trade certificate — done!
5. The tax office will then automatically send you a tax registration questionnaire

Kleinunternehmerregelung (§ 19 UStG)

If your annual turnover is below €25,000 (new threshold since 2025):
- You don't have to charge VAT on invoices
- Advantage: Simpler bookkeeping, lower prices for private customers
- Disadvantage: You can't reclaim input tax

Taxes for Self-Employed

Income tax

• Same as employees: progressive 0–45 %
• Basic exemption 2026: €12,348
• Quarterly advance payments to the tax office

VAT (value-added tax)

• 19 % (standard) or 7 % (reduced: food, books, culture)
• Monthly or quarterly VAT return (via ELSTER)
• Not applicable for Kleinunternehmerregelung

Trade tax (Gewerbesteuer)

• Only for Gewerbe holders
• Exemption threshold: €24,500/year
• Rate varies by city (e.g., Hamburg: 470 %, Munich: 490 %)

Health Insurance

As a self-employed person, you must insure yourself:
- GKV (voluntary): Minimum contribution ~€220/month (without income) to max. ~€1,100/month
- PKV: From ~€300/month (depending on age and health)

Tips

• Hire a tax advisor from the start — saves money and stress long-term
• Open a business account — keep personal and business finances separate!
• Invoice correctly (required information: name, tax ID, invoice number, date, service description, amount)
• For non-EU citizens: residence permit must allow self-employment